Credit Linked Capital Subsidy Scheme {क्रेडिट लिंक्‍ड सब्सिडी स्कीम}

The Ministry of Small Scale Industries launched the Credit Linked Capital Subsidy Scheme (CLCSS) to improve the Small Scale Industries' technological improvement. The primary aim of this scheme is to provide technological advancement by giving upfront capital subsidy to SSI units, along with the khadi, tiny, coir, and village industries, by upgrading their production pieces of equipment, including the machinery and plants and techniques. Under this scheme, twelve percent of the subsidy will be given to SSI units. 


The CLCSS scheme has the main objective of upgrading the SMEs' technology by providing 15% capital subsidy to SSI Units, including tiny, khadi, village, and coir industrial units on institutional finance gained by them for the initiation of well-known and up-graded technologies in the specific sub-sectors.

Scope of the Scheme

The following needs will be fulfilled under this scheme:

  • Biotech Industry 
  • Common Effluent Treatment Plant 
  • Corrugated Boxes 
  • Drugs and Pharmaceuticals
  • Dyes and Intermediates 
  • Industry based on Medicinal and Aromatic plants 
  • Plastic Moulded/ Extruded Products and Parts/ Components 
  • Rubber Processing including Cycle/ Rickshaw Tyres
  • Food Processing (including Ice Cream manufacturing
  • Poultry Hatchery & Cattle Feed Industry 
  • Dimensional Stone Industry (excluding Quarrying and Mining) 
  • Glass and Ceramic Items including Tiles 
  • Leather and Leather Products including Footwear and Garments 
  • Electronic equipment viz tests, measuring and assembly/ manufacturing, Industrial process control; Analytical, Medical, Electronic Consumer & Communication equipment, etc.
  • Fans & Motors Industry 
  • General Light Service(GLS) lamps 
  • Information Technology (Hardware) 
  • Mineral Filled Sheathed Heating Elements 
  • Transformer/ Electrical Stampings/ Laminations /Coils/Chokes including Solenoid coils 
  • Wires & Cable Industry
  • Auto Parts and Components 
  • Bicycle Parts 
  • Combustion Devices/ Appliances 
  • Forging & Hand Tools 
  • Foundries – Steel and Cast Iron 
  • General Engineering Works 
  • Gold Plating and Jewellery 
  • Locks 
  • Steel Furniture 
  • Toys 
  • NonFerrous Foundry 
  • Sport Goods 
  • Cosmetics
  • Readymade Garments 
  • Wooden Furniture
  • Mineral Water Bottle 
  • Paints, Varnishes, Alkyds, and Alkyd products 
  • Agricultural Implements and Post Harvest Equipment 
  • Beneficiation of Graphite and Phosphate 
  • Khadi and Village Industries 
  • Coir and Coir Products 
  • Steel Rerolling and Pencil Ingot making Industries 
  • Zinc Sulphate 
  • Welding Electrodes
  • Sewing Machine Industry


The nodal agencies for this scheme will be SIDBI- The Small Industries Development Bank of India and NABARD- National Bank for Agriculture and Rural Development. However, these banks mentioned below have been chosen as the nodal agencies or banks for the execution of the above scheme as well.

  • State Bank of India
  • Canara Bank
  • Bank of Baroda
  • Punjab National Bank
  • Bank of India
  • Andhra Bank
  • State Bank of Bikaner and Jaipur
  • Tamil Nadu Industrial Investment Corporation
  • The National Small Industries Corporations Ltd.

Eligible Beneficiaries

The eligible beneficiaries under this scheme are the 

  • Sole Proprietorships
  • Cooperative societies
  • Partnerships
  • Public and Private limited companies

However, the top priority will be given to women entrepreneurs.

Eligibility Criteria for Credit Linked Capital Subsidy Scheme

  • The loans sanctioned by the PLI after 29 September 2005 are eligible for the investment in machinery and plant with the upgraded rate of 15% capital subsidy. The machinery bought under the Hire Purchase Scheme by the NSIC are also qualifies for subsidy under this scheme.
  • The industries transitioning from small to medium scale on the balance of approval of added loans under the CLCSS scheme will be allowed for assistance as well.
  • The capital subsidy under this scheme is not connected to any type of refinancing scheme of the Nodal Agencies. Therefore, it is not mandatory that PLI must seek to refinance for the term loan approval by any kind of refinancing nodal agencies.
  • Labor intensive, export sectors, and new sector activities will also be benefited under this scheme.

Eligible amount for Loan and Capital Subsidy

The maximum limit for the loan under the scheme is INR 100 lakhs. Therefore, the subsidy will be INR 15 lakhs or 15% of the total investment in the qualified plant and machinery, whatever is lower.

While calculating the Value of Plant and Machinery; the following costs will be excluded:

  • The price of types of equipment i.e., jigs, tools, spare parts, and molds for the conservation and the prices of the consumable stores.
  • Installation of plant and machinery cost.
  • The price for the development and research tools and the pieces of equipment for pollution control.
  • The installation and regulation of the extra transformers and setting up of those as per the rules and regulations by the State Electricity Board. 
  • The fees are given to the banks or the National Small Industries Corporation Ltd or the State Small Industries Corporation.
  • The charges for the gas-producing plants.
  • The transportation costs for the movement of the machinery from one place to another.
  • The charges for firefighting pieces of equipment.

The scheme will be monitored by the GTAB- Governing and Technology Approval Board. The secretary of the SSI will be the chairperson, and the Additional Secretary & Development Commissioner of SSI is the Member Secretary of the board. The GTAB will be responsible for the scheduled review of the regulation and functioning of the project. 

Frequently Asked Questions

Q. What is Credit Linked Capital Subsidy Scheme or CLCSC?

The CLCSC (Credit Linked Capital Subsidy Scheme) is to upgrade the technologies of the Micro and Small Enterprises in India.

Q. Where can I apply for this scheme?

You can apply for this scheme at the online portal.

Q. When was this launched?

The scheme was launched in 2000-2001.

Q. What is the objective of the scheme?

The CLCSS scheme has the main objective of upgrading the technology of the SMEs by providing 15% capital subsidy to SSI Units, including tiny, khadi, village, and coir industrial units on institutional finance gained by them for the initiation of well-known and up-graded technologies in the specific sub-sectors.

Q. How many sub-sectors are under this scheme?

There are 51 sub-sectors under this scheme till now.

Q. Is this scheme applicable to the medium and large scale enterprises?

No, this scheme is only for small scale industries by far.

Q. Is the scheme applicable for new MSEs?

Yes, this scheme applies to the new MSEs too.